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[House Report 108-34]
[From the U.S. Government Publishing Office]

108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     108-34

======================================================================

 
PROVIDING FOR CONSIDERATION OF H.R. 5, HELP EFFICIENT, ACCESSIBLE, LOW 
              COST, TIMELY HEALTHCARE (HEALTH) ACT OF 2003

                                _______
                                

   March 12, 2003.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Reynolds, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 139]

    The Committee on Rules, having had under consideration 
House Resolution 139, by a nonrecord vote, reports the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 5, the 
Help Efficient, Accessible, Low Cost, Timely Healthcare 
(HEALTH) Act of 2003, under a closed rule. The rule provides 
two hours of debate in the House, with 80 minutes equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on the Judiciary and 40 minutes equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on Energy and Commerce. The rule waives 
all points of order against consideration of the bill.
    The rule further provides that in lieu of the amendments 
recommended by the Committees on the Judiciary and on Energy 
and Commerce now printed in the bill, the amendment in the 
nature of a substitute printed in this report shall be 
considered as adopted. The rule provides one motion to recommit 
with or without instructions. Finally, the rule provides that 
House Resolution 126 is laid on the table.
    The waiver of all points of order includes a waiver of 
clause 4(a) of rule XIII (requiring a three-day layover of 
committee reports) and of section 303 of the Congressional 
Budget Act (prohibiting consideration of legislation, as 
reported, providing new budget authority, change in revenues, 
change in public debt, new entitlement authority, or new credit 
authority for a fiscal year until the budget resolution for 
that year has been agreed to). The waiver of clause 4(a) of 
rule XIII is necessary because reports were not available until 
Tuesday, March 11 and the bill may be considered by the House 
as early as Thursday, March 13, 2003. The waiver of section 303 
is necessary because a reduction of healthcare costs will 
increase wages and result in increased revenues.

                            COMMITTEE VOTES

    Pursuant to clause 3(b) of House rule XIII the results of 
each record vote on an amendment or motion to report, together 
with the names of those voting for and against, are printed 
below:

Rules Committee record vote No. 16

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To report an open rule.
    Results: Defeated 3 to 7.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; 
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea; 
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 17

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order the amendment in the 
nature of a substitute offered by Representatives Conyers and 
Dingell as modified.
    Results: Defeated 3 to 7.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; 
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea; 
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 18

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: to make in order the amendment offered 
by Representative Pallone which clarifies the definitions to 
ensure that its liability protections do not apply to HMOs and 
drug and device manufacturers.
    Results: Defeated 3 to 7.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; 
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea; 
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 19

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order the amendment offered 
Representative Sandlin which prohibits a carrier offering 
medical malpractice insurance from charging a premium that 
exceeds 80 percent of the amount of the premium charged during 
calendar year 2001, but provides that carriers are permitted to 
increase their premium rates on an annual basis in an amount no 
greater than any increase in the Consumer Price Index plus 2 
percent. Provides that the Secretary of Health and Human 
Services may offer an adjustment to such limitation to a 
carrier that satisfactorily demonstrates it would be unable to 
earn a fair rate of return due to the imposed limitation, 
provided, that the adjustment may not exceed the minimum amount 
that the Secretary determines is required for the carrier to 
realize a fair rate of return.
    Results: Defeated 3 to 7.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; 
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea; 
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 20

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order the amendment offered 
by Representative Sandlin which prohibits a carrier offering 
medical malpractice insurance from charging a premium that 
exceeds 80 percent of the amount of the premium charged during 
calendar year 2001. Provides that the Secretary of Health and 
Human Services may make an adjustment to such limitation to a 
carrier that satisfactorily demonstrates it would be unable to 
earn a fair rate of return due to the imposed limitation, 
provided, that the adjustment may not exceed the minimum amount 
that the Secretary determines is required for the carrier to 
realize a fair rate of return.
    Results: Defeated 3 to 7.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; 
Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--Yea; 
McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 21

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order the amendment offered 
by Representative Jackson-Lee which strikes the cap on punitive 
damages.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 22

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order the amendment in the 
nature of a substitute offered by Representatives Conyers and 
Dingell with the appropriate waivers.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 23

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Delahunt which changes the $250,000 cap on 
non-economic damages to $1,607,615 to reflect the increase in 
the cost of medical care since California enacted its $250,000 
cap in 1975.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 24

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Delahunt which Bars health care lawsuits in 
all cases unless the complaint is filed within 3 years after 
date injury is or should have been discovered. Amendment also 
tolls statute of limitations for minors until they come of age.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 25

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Jackson-Lee which mandates the state agencies 
regulating insurance create a State Impaired Physicians Fund to 
provide services including drug and alcohol treatment 
counseling for physicians and a Participating Physicians Fund 
to provide training for physicians treating indigent 
populations. Would require all medical malpractice insurers to 
contribute 2 percent of their savings derived from the 
provisions of this Act, to the State Impaired Physicians Fund.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 26

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Hoeffel which allows for court to exceed 
$250,000 damages cap in cases where it finds a severe or 
permanent loss or impairment of a bodily function or 
substantial disfigurement or other special circumstances. In 
such cases, the cap could be exceeded if failing to do so would 
deprive the claimant of just compensation for the injuries 
sustained.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 27

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Nadler which indexes the $250,000 cap on non-
economic and punitive damages in the bill for inflation.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 28

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Nadler which prohibits secret settlements in 
medical malpractice cases unless a judge finds that doing so 
would not harm the public health and safety.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 29

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Jackson-Lee which strikes the non-economic 
damage cap.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 30

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order the amendment offered 
by Representative Jackson-Lee which prohibits any malpractice 
insurer from increasing rates during the 12 months following 
enactment of this Act.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 31

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Jackson-Lee which requires that all medical 
malpractice insurers make a reasonable estimate of their annual 
savings achieved as a result of this Act. Requires the insurers 
to develop and implement a plan to dedicate at least 50 percent 
of those savings to reduction of premiums for covered 
physicians.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 32

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Stupak which adds a section removing the 
antitrust exemption for health care liability insurance 
companies.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 33

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Scott of Virginia which removes section 6 
from the bill.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 34

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Scott of Virginia which deletes subsection 
``(D)'' on page 20 of the bill, the so-called ``Fair Share 
Rule.''
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 35

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Stupak which allows the non-economic damages 
cap to rise with the rate of inflation.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 36

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order the amendment offered 
by Representative Berkley which provides a Sense of the 
Congress to express that medical malpractice liability reform 
should be accompanied by insurance reform.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

Rules Committee record vote No. 37

    Date: March 12, 2003.
    Measure: H.R. 5.
    Motion by: Mr. Frost.
    Summary of motion: To make in order an en bloc amendment.
    Results: Defeated 3 to 8.
    Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Myrick--Nay; Sessions--Nay; Reynolds--Nay; Frost--
Yea; McGovern--Yea; Hastings (FL)--Yea; Dreier--Nay.

            SUMMARY OF AMENDMENT TO BE CONSIDERED AS ADOPTED

(Summary derived from information provided by the sponsor.)

    Sensenbrenner/Tauzin: Amendment in the Nature of a 
Substitute. Includes a 3 year statute of limitations with 
certain exceptions for minors, fraud, intentional concealment 
and the presence of a foreign body; a $250,000 cap on non-
economic damages and a ``fair share'' rule, by which damages 
are allocated fairly, in direct proportion to fault; sliding 
scale limits on the contingency fees lawyers can charge; 
authorization for defendants to introduce evidence showing the 
plaintiff received compensation for losses from outside sources 
(to prevent double recoveries); guidelines for the award of 
punitive damages, including guidelines for punitive damages 
award not to exceed the greater of $250,000 or twice economic 
damages; a safe harbor from punitive damages for products that 
meet applicable FDA safety requirements, with exceptions for 
cases in which information required to be given to the FDA was 
withheld and cases in which illegal payments were made to the 
FDA; protections of pharmacists and doctors from being named in 
lawsuits for forum-shopping purposes; authorization for courts 
to require periodic payments for future damages; except as 
provided in the Act nothing in the Act shall affect any defense 
available to a defendant in a health care lawsuit or action 
under any other provision of federal law; a savings clause that 
saves from preemption state laws that limit damages to specific 
amounts.

                TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Help Efficient, Accessible, 
Low-cost, Timely Healthcare (HEALTH) Act of 2003''.

SEC. 2. FINDINGS AND PURPOSE.

  (a) Findings.--
          (1) Effect on health care access and costs.--Congress 
        finds that our current civil justice system is 
        adversely affecting patient access to health care 
        services, better patient care, and cost-efficient 
        health care, in that the health care liability system 
        is a costly and ineffective mechanism for resolving 
        claims of health care liability and compensating 
        injured patients, and is a deterrent to the sharing of 
        information among health care professionals which 
        impedes efforts to improve patient safety and quality 
        of care.
          (2) Effect on interstate commerce.--Congress finds 
        that the health care and insurance industries are 
        industries affecting interstate commerce and the health 
        care liability litigation systems existing throughout 
        the United States are activities that affect interstate 
        commerce by contributing to the high costs of health 
        care and premiums for health care liability insurance 
        purchased by health care system providers.
          (3) Effect on federal spending.--Congress finds that 
        the health care liability litigation systems existing 
        throughout the United States have a significant effect 
        on the amount, distribution, and use of Federal funds 
        because of--
                  (A) the large number of individuals who 
                receive health care benefits under programs 
                operated or financed by the Federal Government;
                  (B) the large number of individuals who 
                benefit because of the exclusion from Federal 
                taxes of the amounts spent to provide them with 
                health insurance benefits; and
                  (C) the large number of health care providers 
                who provide items or services for which the 
                Federal Government makes payments.
  (b) Purpose.--It is the purpose of this Act to implement 
reasonable, comprehensive, and effective health care liability 
reforms designed to--
          (1) improve the availability of health care services 
        in cases in which health care liability actions have 
        been shown to be a factor in the decreased availability 
        of services;
          (2) reduce the incidence of ``defensive medicine'' 
        and lower the cost of health care liability insurance, 
        all of which contribute to the escalation of health 
        care costs;
          (3) ensure that persons with meritorious health care 
        injury claims receive fair and adequate compensation, 
        including reasonable noneconomic damages;
          (4) improve the fairness and cost-effectiveness of 
        our current health care liability system to resolve 
        disputes over, and provide compensation for, health 
        care liability by reducing uncertainty in the amount of 
        compensation provided to injured individuals; and
          (5) provide an increased sharing of information in 
        the health care system which will reduce unintended 
        injury and improve patient care.

SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

  The time for the commencement of a health care lawsuit shall 
be 3 years after the date of manifestation of injury or 1 year 
after the claimant discovers, or through the use of reasonable 
diligence should have discovered, the injury, whichever occurs 
first. In no event shall the time for commencement of a health 
care lawsuit exceed 3 years after the date of manifestation of 
injury unless tolled for any of the following:
          (1) Upon proof of fraud;
          (2) Intentional concealment; or
          (3) The presence of a foreign body, which has no 
        therapeutic or diagnostic purpose or effect, in the 
        person of the injured person.
Actions by a minor shall be commenced within 3 years from the 
date of the alleged manifestation of injury except that actions 
by a minor under the full age of 6 years shall be commenced 
within 3 years of manifestation of injury or prior to the 
minor's 8th birthday, whichever provides a longer period. Such 
time limitation shall be tolled for minors for any period 
during which a parent or guardian and a health care provider or 
health care organization have committed fraud or collusion in 
the failure to bring an action on behalf of the injured minor.

SEC. 4. COMPENSATING PATIENT INJURY.

  (a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in 
this Act shall limit a claimant's recovery of the full amount 
of the available economic damages, notwithstanding the 
limitation in subsection (b).
  (b) Additional Noneconomic Damages.--In any health care 
lawsuit, the amount of noneconomic damages, if available, may 
be as much as $250,000, regardless of the number of parties 
against whom the action is brought or the number of separate 
claims or actions brought with respect to the same injury.
  (c) No Discount of Award for Noneconomic Damages.--For 
purposes of applying the limitation in subsection (b), future 
noneconomic damages shall not be discounted to present value. 
The jury shall not be informed about the maximum award for 
noneconomic damages. An award for noneconomic damages in excess 
of $250,000 shall be reduced either before the entry of 
judgment, or by amendment of the judgment after entry of 
judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate 
awards are rendered for past and future noneconomic damages and 
the combined awards exceed $250,000, the future noneconomic 
damages shall be reduced first.
  (d) Fair Share Rule.--In any health care lawsuit, each party 
shall be liable for that party's several share of any damages 
only and not for the share of any other person. Each party 
shall be liable only for the amount of damages allocated to 
such party in direct proportion to such party's percentage of 
responsibility. Whenever a judgment of liability is rendered as 
to any party, a separate judgment shall be rendered against 
each such party for the amount allocated to such party. For 
purposes of this section, the trier of fact shall determine the 
proportion of responsibility of each party for the claimant's 
harm.

SEC. 5. MAXIMIZING PATIENT RECOVERY.

  (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any health care lawsuit, the court shall 
supervise the arrangements for payment of damages to protect 
against conflicts of interest that may have the effect of 
reducing the amount of damages awarded that are actually paid 
to claimants. In particular, in any health care lawsuit in 
which the attorney for a party claims a financial stake in the 
outcome by virtue of a contingent fee, the court shall have the 
power to restrict the payment of a claimant's damage recovery 
to such attorney, and to redirect such damages to the claimant 
based upon the interests of justice and principles of equity. 
In no event shall the total of all contingent fees for 
representing all claimants in a health care lawsuit exceed the 
following limits:
          (1) 40 percent of the first $50,000 recovered by the 
        claimant(s).
          (2) 33\1/3\ percent of the next $50,000 recovered by 
        the claimant(s).
          (3) 25 percent of the next $500,000 recovered by the 
        claimant(s).
          (4) 15 percent of any amount by which the recovery by 
        the claimant(s) is in excess of $600,000.
  (b) Applicability.--The limitations in this section shall 
apply whether the recovery is by judgment, settlement, 
mediation, arbitration, or any other form of alternative 
dispute resolution. In a health care lawsuit involving a minor 
or incompetent person, a court retains the authority to 
authorize or approve a fee that is less than the maximum 
permitted under this section. The requirement for court 
supervision in the first two sentences of subsection (a) 
applies only in civil actions.

SEC. 6. ADDITIONAL HEALTH BENEFITS.

  In any health care lawsuit involving injury or wrongful 
death, any party may introduce evidence of collateral source 
benefits. If a party elects to introduce such evidence, any 
opposing party may introduce evidence of any amount paid or 
contributed or reasonably likely to be paid or contributed in 
the future by or on behalf of the opposing party to secure the 
right to such collateral source benefits. No provider of 
collateral source benefits shall recover any amount against the 
claimant or receive any lien or credit against the claimant's 
recovery or be equitably or legally subrogated to the right of 
the claimant in a health care lawsuit involving injury or 
wrongful death. This section shall apply to any health care 
lawsuit that is settled as well as a health care lawsuit that 
is resolved by a fact finder. This section shall not apply to 
section 1862(b) (42 U.S.C. 1395y(b)) or section 1902(a)(25) (42 
U.S.C. 1396a(a)(25)) of the Social Security Act.

SEC. 7. PUNITIVE DAMAGES.

  (a) In General.--Punitive damages may, if otherwise permitted 
by applicable State or Federal law, be awarded against any 
person in a health care lawsuit only if it is proven by clear 
and convincing evidence that such person acted with malicious 
intent to injure the claimant, or that such person deliberately 
failed to avoid unnecessary injury that such person knew the 
claimant was substantially certain to suffer. In any health 
care lawsuit where no judgment for compensatory damages is 
rendered against such person, no punitive damages may be 
awarded with respect to the claim in such lawsuit. No demand 
for punitive damages shall be included in a health care lawsuit 
as initially filed. A court may allow a claimant to file an 
amended pleading for punitive damages only upon a motion by the 
claimant and after a finding by the court, upon review of 
supporting and opposing affidavits or after a hearing, after 
weighing the evidence, that the claimant has established by a 
substantial probability that the claimant will prevail on the 
claim for punitive damages. At the request of any party in a 
health care lawsuit, the trier of fact shall consider in a 
separate proceeding--
          (1) whether punitive damages are to be awarded and 
        the amount of such award; and
          (2) the amount of punitive damages following a 
        determination of punitive liability.
If a separate proceeding is requested, evidence relevant only 
to the claim for punitive damages, as determined by applicable 
State law, shall be inadmissible in any proceeding to determine 
whether compensatory damages are to be awarded.
  (b) Determining Amount of Punitive Damages.--
          (1) Factors considered.--In determining the amount of 
        punitive damages, if awarded, in a health care lawsuit, 
        the trier of fact shall consider only the following:
                  (A) the severity of the harm caused by the 
                conduct of such party;
                  (B) the duration of the conduct or any 
                concealment of it by such party;
                  (C) the profitability of the conduct to such 
                party;
                  (D) the number of products sold or medical 
                procedures rendered for compensation, as the 
                case may be, by such party, of the kind causing 
                the harm complained of by the claimant;
                  (E) any criminal penalties imposed on such 
                party, as a result of the conduct complained of 
                by the claimant; and
                  (F) the amount of any civil fines assessed 
                against such party as a result of the conduct 
                complained of by the claimant.
          (2) Maximum award.--The amount of punitive damages, 
        if awarded, in a health care lawsuit may be as much as 
        $250,000 or as much as two times the amount of economic 
        damages awarded, whichever is greater. The jury shall 
        not be informed of this limitation.
  (c) No Punitive Damages for Products That Comply With FDA 
Standards.--
          (1) In general.--
                  (A) No punitive damages may be awarded 
                against the manufacturer or distributor of a 
                medical product, or a supplier of any component 
                or raw material of such medical product, based 
                on a claim that such product caused the 
                claimant's harm where--
                          (i)(I) such medical product was 
                        subject to premarket approval, 
                        clearance, or licensure by the Food and 
                        Drug Administration with respect to the 
                        safety of the formulation or 
                        performance of the aspect of such 
                        medical product which caused the 
                        claimant's harm or the adequacy of the 
                        packaging or labeling of such medical 
                        product; and
                          (II) such medical product was so 
                        approved, cleared, or licensed; or
                          (ii) such medical product is 
                        generally recognized among qualified 
                        experts as safe and effective pursuant 
                        to conditions established by the Food 
                        and Drug Administration and applicable 
                        Food and Drug Administration 
                        regulations, including without 
                        limitation those related to packaging 
                        and labeling, unless the Food and Drug 
                        Administration has determined that such 
                        medical product was not manufactured or 
                        distributed in substantial compliance 
                        with applicable Food and Drug 
                        Administration statutes and 
                        regulations.
                  (B) Rule of construction.--Subparagraph (A) 
                may not be construed as establishing the 
                obligation of the Food and Drug Administration 
                to demonstrate affirmatively that a 
                manufacturer, distributor, or supplier referred 
                to in such subparagraph meets any of the 
                conditions described in such subparagraph.
          (2) Liability of health care providers.--A health 
        care provider who prescribes, or who dispenses pursuant 
        to a prescription, a medical product approved, 
        licensed, or cleared by the Food and Drug 
        Administration shall not be named as a party to a 
        product liability lawsuit involving such product and 
        shall not be liable to a claimant in a class action 
        lawsuit against the manufacturer, distributor, or 
        seller of such product. Nothing in this paragraph 
        prevents a court from consolidating cases involving 
        health care providers and cases involving products 
        liability claims against the manufacturer, distributor, 
        or product seller of such medical product.
          (3) Packaging.--In a health care lawsuit for harm 
        which is alleged to relate to the adequacy of the 
        packaging or labeling of a drug which is required to 
        have tamper-resistant packaging under regulations of 
        the Secretary of Health and Human Services (including 
        labeling regulations related to such packaging), the 
        manufacturer or product seller of the drug shall not be 
        held liable for punitive damages unless such packaging 
        or labeling is found by the trier of fact by clear and 
        convincing evidence to be substantially out of 
        compliance with such regulations.
          (4) Exception.--Paragraph (1) shall not apply in any 
        health care lawsuit in which--
                  (A) a person, before or after premarket 
                approval, clearance, or licensure of such 
                medical product, knowingly misrepresented to or 
                withheld from the Food and Drug Administration 
                information that is required to be submitted 
                under the Federal Food, Drug, and Cosmetic Act 
                (21 U.S.C. 301 et seq.) or section 351 of the 
                Public Health Service Act (42 U.S.C. 262) that 
                is material and is causally related to the harm 
                which the claimant allegedly suffered; or
                  (B) a person made an illegal payment to an 
                official of the Food and Drug Administration 
                for the purpose of either securing or 
                maintaining approval, clearance, or licensure 
                of such medical product.

SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
                    HEALTH CARE LAWSUITS.

  (a) In General.--In any health care lawsuit, if an award of 
future damages, without reduction to present value, equaling or 
exceeding $50,000 is made against a party with sufficient 
insurance or other assets to fund a periodic payment of such a 
judgment, the court shall, at the request of any party, enter a 
judgment ordering that the future damages be paid by periodic 
payments. In any health care lawsuit, the court may be guided 
by the Uniform Periodic Payment of Judgments Act promulgated by 
the National Conference of Commissioners on Uniform State Laws.
  (b) Applicability.--This section applies to all actions which 
have not been first set for trial or retrial before the 
effective date of this Act.

SEC. 9. DEFINITIONS.

  In this Act:
          (1) Alternative dispute resolution system; adr.--The 
        term ``alternative dispute resolution system'' or 
        ``ADR'' means a system that provides for the resolution 
        of health care lawsuits in a manner other than through 
        a civil action brought in a State or Federal court.
          (2) Claimant.--The term ``claimant'' means any person 
        who brings a health care lawsuit, including a person 
        who asserts or claims a right to legal or equitable 
        contribution, indemnity or subrogation, arising out of 
        a health care liability claim or action, and any person 
        on whose behalf such a claim is asserted or such an 
        action is brought, whether deceased, incompetent, or a 
        minor.
          (3) Collateral source benefits.--The term 
        ``collateral source benefits'' means any amount paid or 
        reasonably likely to be paid in the future to or on 
        behalf of the claimant, or any service, product or 
        other benefit provided or reasonably likely to be 
        provided in the future to or on behalf of the claimant, 
        as a result of the injury or wrongful death, pursuant 
        to--
                  (A) any State or Federal health, sickness, 
                income-disability, accident, or workers' 
                compensation law;
                  (B) any health, sickness, income-disability, 
                or accident insurance that provides health 
                benefits or income-disability coverage;
                  (C) any contract or agreement of any group, 
                organization, partnership, or corporation to 
                provide, pay for, or reimburse the cost of 
                medical, hospital, dental, or income disability 
                benefits; and
                  (D) any other publicly or privately funded 
                program.
          (4) Compensatory damages.--The term ``compensatory 
        damages'' means objectively verifiable monetary losses 
        incurred as a result of the provision of, use of, or 
        payment for (or failure to provide, use, or pay for) 
        health care services or medical products, such as past 
        and future medical expenses, loss of past and future 
        earnings, cost of obtaining domestic services, loss of 
        employment, and loss of business or employment 
        opportunities, damages for physical and emotional pain, 
        suffering, inconvenience, physical impairment, mental 
        anguish, disfigurement, loss of enjoyment of life, loss 
        of society and companionship, loss of consortium (other 
        than loss of domestic service), hedonic damages, injury 
        to reputation, and all other nonpecuniary losses of any 
        kind or nature. The term ``compensatory damages'' 
        includes economic damages and noneconomic damages, as 
        such terms are defined in this section.
          (5) Contingent fee.--The term ``contingent fee'' 
        includes all compensation to any person or persons 
        which is payable only if a recovery is effected on 
        behalf of one or more claimants.
          (6) Economic damages.--The term ``economic damages'' 
        means objectively verifiable monetary losses incurred 
        as a result of the provision of, use of, or payment for 
        (or failure to provide, use, or pay for) health care 
        services or medical products, such as past and future 
        medical expenses, loss of past and future earnings, 
        cost of obtaining domestic services, loss of 
        employment, and loss of business or employment 
        opportunities.
          (7) Health care lawsuit.--The term ``health care 
        lawsuit'' means any health care liability claim 
        concerning the provision of health care goods or 
        services or any medical product affecting interstate 
        commerce, or any health care liability action 
        concerning the provision of health care goods or 
        services or any medical product affecting interstate 
        commerce, brought in a State or Federal court or 
        pursuant to an alternative dispute resolution system, 
        against a health care provider, a health care 
        organization, or the manufacturer, distributor, 
        supplier, marketer, promoter, or seller of a medical 
        product, regardless of the theory of liability on which 
        the claim is based, or the number of claimants, 
        plaintiffs, defendants, or other parties, or the number 
        of claims or causes of action, in which the claimant 
        alleges a health care liability claim. Such term does 
        not include a claim or action which is based on 
        criminal liability; which seeks civil fines or 
        penalties paid to Federal, State, or local government; 
        or which is grounded in antitrust.
          (8) Health care liability action.--The term ``health 
        care liability action'' means a civil action brought in 
        a State or Federal Court or pursuant to an alternative 
        dispute resolution system, against a health care 
        provider, a health care organization, or the 
        manufacturer, distributor, supplier, marketer, 
        promoter, or seller of a medical product, regardless of 
        the theory of liability on which the claim is based, or 
        the number of plaintiffs, defendants, or other parties, 
        or the number of causes of action, in which the 
        claimant alleges a health care liability claim.
          (9) Health care liability claim.--The term ``health 
        care liability claim'' means a demand by any person, 
        whether or not pursuant to ADR, against a health care 
        provider, health care organization, or the 
        manufacturer, distributor, supplier, marketer, 
        promoter, or seller of a medical product, including, 
        but not limited to, third-party claims, cross-claims, 
        counter-claims, or contribution claims, which are based 
        upon the provision of, use of, or payment for (or the 
        failure to provide, use, or pay for) health care 
        services or medical products, regardless of the theory 
        of liability on which the claim is based, or the number 
        of plaintiffs, defendants, or other parties, or the 
        number of causes of action.
          (10) Health care organization.--The term ``health 
        care organization'' means any person or entity which is 
        obligated to provide or pay for health benefits under 
        any health plan, including any person or entity acting 
        under a contract or arrangement with a health care 
        organization to provide or administer any health 
        benefit.
          (11) Health care provider.--The term ``health care 
        provider'' means any person or entityrequired by State 
or Federal laws or regulations to be licensed, registered, or certified 
to provide health care services, and being either so licensed, 
registered, or certified, or exempted from such requirement by other 
statute or regulation.
          (12) Health care goods or services.--The term 
        ``health care goods or services'' means any goods or 
        services provided by a health care organization, 
        provider, or by any individual working under the 
        supervision of a health care provider, that relates to 
        the diagnosis, prevention, or treatment of any human 
        disease or impairment, or the assessment or care of the 
        health of human beings.
          (13) Malicious intent to injure.--The term 
        ``malicious intent to injure'' means intentionally 
        causing or attempting to cause physical injury other 
        than providing health care goods or services.
          (14) Medical product.--The term ``medical product'' 
        means a drug, device, or biological product intended 
        for humans, and the terms ``drug'', ``device'', and 
        ``biological product'' have the meanings given such 
        terms in sections 201(g)(1) and 201(h) of the Federal 
        Food, Drug and Cosmetic Act (21 U.S.C. 321) and section 
        351(a) of the Public Health Service Act (42 U.S.C. 
        262(a)), respectively, including any component or raw 
        material used therein, but excluding health care 
        services.
          (15) Noneconomic damages.--The term ``noneconomic 
        damages'' means damages for physical and emotional 
        pain, suffering, inconvenience, physical impairment, 
        mental anguish, disfigurement, loss of enjoyment of 
        life, loss of society and companionship, loss of 
        consortium (other than loss of domestic service), 
        hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature.
          (16) Punitive damages.--The term ``punitive damages'' 
        means damages awarded, for the purpose of punishment or 
        deterrence, and not solely for compensatory purposes, 
        against a health care provider, health care 
        organization, or a manufacturer, distributor, or 
        supplier of a medical product. Punitive damages are 
        neither economic nor noneconomic damages.
          (17) Recovery.--The term ``recovery'' means the net 
        sum recovered after deducting any disbursements or 
        costs incurred in connection with prosecution or 
        settlement of the claim, including all costs paid or 
        advanced by any person. Costs of health care incurred 
        by the plaintiff and the attorneys' office overhead 
        costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
          (18) State.--The term ``State'' means each of the 
        several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, the Northern Mariana Islands, the Trust 
        Territory of the Pacific Islands, and any other 
        territory or possession of the United States, or any 
        political subdivision thereof.

SEC. 10. EFFECT ON OTHER LAWS.

  (a) Vaccine Injury.--
          (1) To the extent that title XXI of the Public Health 
        Service Act establishes a Federal rule of law 
        applicable to a civil action brought for a vaccine-
        related injury or death--
                  (A) this Act does not affect the application 
                of the rule of law to such an action; and
                  (B) any rule of law prescribed by this Act in 
                conflict with a rule of law of such title XXI 
                shall not apply to such action.
          (2) If there is an aspect of a civil action brought 
        for a vaccine-related injury or death to which a 
        Federal rule of law under title XXI of the Public 
        Health Service Act does not apply, then this Act or 
        otherwise applicable law (as determined under this Act) 
        will apply to such aspect of such action.
  (b) Other Federal Law.--Except as provided in this section, 
nothing in this Act shall be deemed to affect any defense 
available to a defendant in a health care lawsuit or action 
under any other provision of Federal law.

SEC. 11. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

  (a) Health Care Lawsuits.--The provisions governing health 
care lawsuits set forth in this Act preempt, subject to 
subsections (b) and (c), State law to the extent that State law 
prevents the application of any provisions of law established 
by or under this Act. The provisions governing health care 
lawsuits set forth in this Act supersede chapter 171 of title 
28, United States Code, to the extent that such chapter--
          (1) provides for a greater amount of damages or 
        contingent fees, a longer period in which a health care 
        lawsuit may be commenced, or a reduced applicability or 
        scope of periodic payment of future damages, than 
        provided in this Act; or
          (2) prohibits the introduction of evidence regarding 
        collateral source benefits, or mandates or permits 
        subrogation or a lien on collateral source benefits.
  (b) Protection of States' Rights and Other Laws.--(1) Any 
issue that is not governed by any provision of law established 
by or under this Act (including State standards of negligence) 
shall be governed by otherwise applicable State or Federal law.
  (2) This Act shall not preempt or supersede any State or 
Federal law that imposes greater procedural or substantive 
protections for health care providers and health care 
organizations from liability, loss, or damages than those 
provided by this Act or create a cause of action.
  (c) State Flexibility.--No provision of this Act shall be 
construed to preempt--
          (1) any State law (whether effective before, on, or 
        after the date of the enactment of this Act) that 
        specifies a particular monetary amount of compensatory 
        or punitive damages (or the total amount of damages) 
        that may be awarded in a health care lawsuit, 
        regardless of whether such monetary amount is greater 
        or lesser than is provided for under this Act, 
        notwithstanding section 4(a); or
          (2) any defense available to a party in a health care 
        lawsuit under any other provision of State or Federal 
        law.

SEC. 12. APPLICABILITY; EFFECTIVE DATE.

  This Act shall apply to any health care lawsuit brought in a 
Federal or State court, or subject to an alternative dispute 
resolution system, that is initiated on or after the date of 
the enactment of this Act, except that any health care lawsuit 
arising from an injury occurring prior to the date of the 
enactment of this Act shall be governed by the applicable 
statute of limitations provisions in effect at the time the 
injury occurred.

SEC. 13. SENSE OF CONGRESS.

  It is the sense of Congress that a health insurer should be 
liable for damages for harm caused when it makes a decision as 
to what care is medically necessary and appropriate.

                                
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